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Dividends
Stock market is a mine to mint unlimited wealth. If one can devote some time to learn it properly and implement, their future generations will be set by mere investing in the right stocks. Recently, people have been fascinated with dividends, but we have heard many of our viewers loosing their hard-earned money falling for it.
In the greed of having an income of Rs 5-15 a share, people loose thousands from their precious capital. But, after reading this, you’ll have a clear understanding about what to do with dividends. This newsletter is dedicated for you viewers and will continue to do so!
To let us know what you want to be covered in the next week, connect with us on Twitter Spaces,
this Friday, 8 PM on Twitter!
What sensational did you miss this week?
FII continue selloff in financial, IT and Telecom companies due to expensive valuation, metal and mining become the new favourites.
Renowned US investor firm alleges Adani stocks as heavily manipulated, Adani stocks and acquisitions ACC and Ambuja also tumble.
Amid fear of global recession and re-emergence of Covid in China, expectations of a balanced budget on 1st Feb, Halwa ceremony was celebrated yesterday.
What can you learn from this?
Technicals: Check the sectoral trend of the sectors using 200 Daily Moving Average or Fibonacci Retracements.
Fundamentals: Check the financial sheets of Adani stocks to identify how overleveraged the companies are.
Upcoming IPOs:
Adani FPO is opening from 27th January, and will close on 31st January. FPO price has been fixed at ₹3,112 to ₹3,276 per equity share whereas current price is around ₹3,400 apiece on NSE.
Video in Focus!
Earn ₹1,00,000 INCOME From Dividends | 5 Best Passive Income Stocks To Invest | by Harsh Goela
Market Outlook this coming week!
Nifty50 : This Week
Blog in Focus this week
Are you trading daily in the markets, but profits seem far-fledged to you?
Identify the major mistakes you’re committing
in the next 5 mins!
Story of the Week
Vaibhav, works in 9 to 7 in a software company firm. He wants to have a quarterly passive source of income which gets credited to his bank. He would utilize it for holidays and trips. In a jiffy, he searches and comes across Dividend Investing Strategy on YouTube and finds out that Vedanta was exceptional in all the parameters to look out for. In May 2022, he heard that he would receive 3150% Dividend if he had the shares with him on 06 May 2022 (ex-dividend date). He quickly buys 100 shares a couple of days before the Ex-dividend date.
After buying he gets stuck in his hectic schedule and on 30th May 2022 his phone chimes with a dividend credit message. He was surprised to see that he got Rs 3150 for 100 shares, that he bought. Instinctively he went to his portfolio to see what happened with the stock but was shocked to see that the stock had fallen around 20% which was around 80 Rs per share (around Rs 8000 loss).
This came to him as a disaster! Cursing the YouTube video he thought that stock market is truly a gamble and no common man ever profiteers from it.
Now, what did you learn from this story?
1. Take notes of strategy which you’re planning to execute and backtest in atleast 25-50 stocks to know the real picture.
2. Be clear about when to buy and when to sell and stick to it without making any emotional decisions.
3. Don’t buy just by looking at the %age of the Dividend. It is offered on the face value of the share and not on the stock price.
The chart on the side shows how the highest dividend giving stock prices have changed in the last 12 months, thus it is important to choose the right stock!
4. To earn a consistent dividend income, the stock must be bought at a right price and not on ex-dividend date or a couple of days before, if you wish to remain invested alongside. Otherwise, you know what happened with Vaibhav.
Check out our simplest investing strategy here!
Question of the Week #
Replies with correct answers (within the first 5 mins of receiving this newsletter), will get a shoutout from us...
PS: Don't forget to share your Instagram handle too in the reply!
1: The Indian Stock Market is regulated by:
a) Reserve Bank Of India
b) Government Of India
c) Securities And Exchange Board Of India
d) Federal Bank
2: The largest Stock Market Exchange in India is:
a) Bombay Stock Exchange
b) National Stock Exchange
c) Delhi Stock Exchange
d) Multi Commodity Stock Exchange
3: Share or fraction of profits, distributed by the company’s management in cash to an investiors bank a/c is called?
a) Bonus
b) Rights Issue
c) Splits
d) Dividend
4: The current price of a stock is decided by:
a) Stock Exchange like NSE and BSE
b) Buyers and sellers of through Demand Supply
c) Government
d) SEBI
5: Short sellling is:
a) Selling an instrument like stock first and then buying later
b) Buying an insturment like stock and then lending it for profits
c) Buying Instruments like Derivatives- futures and options
**Make sure you note your choices somewhere as we’ll covering the answers in our next issue…
Word of the week
Dividend Yield: It is a ratio which tells us how much dividend a company gives to its shareholders p.a., relative to its current share price. In a Dividend Investment strategy, this parameter